Procter & Gamble has raised its annual core profit forecast as it benefits from easing commodity costs and higher product prices of its cleaning and household items.
As raw material prices come down from the peaks seen during the pandemic, major consumer goods companies are seeing relief from higher production costs.
P&G said it now expects a benefit of about $900 million (€846 million) after-tax from favourable commodity costs for fiscal year 2024, compared with its earlier forecast of an $800 million (€752 million) benefit.
The consumer goods giant now expects core earnings per share to rise between 10% and 11% in fiscal 2024, above its prior forecast of 8% to 9% growth.
Third-Quarter Sales
Third-quarter net sales rose to $20.20 billion (€19.01 billion) from $20.07 billion (€18.91 billion) a year earlier, but fell short of analysts' average expectation of $20.41 billion (€19.22 billion), according to LSEG data.
Shares of the company were marginally down in premarket trading.
Consumer Spend In China
P&G has seen a hit to sales from weak consumer spending in its second-largest market China, which is reeling under high youth unemployment, a sluggish property market, and deflationary pressures.
This has also led to lower sales for P&G's beauty brand, SK-II, which has overshadowed gains from steady sales of daily-use products in the United States and Europe.
The US-based firm reported overall flat volumes in the third quarter, while the average prices across its product categories rose 3%.
Net income attributable to Procter & Gamble rose $3.75 billion (€3.52 billion), or $1.52 (€1.43) per share, in the quarter to the end of March, from $3.40 billion (€3.20 billion), or $1.37 (€1.29) per share, a year earlier.
Focused Product Portfolio
“We remain committed to our integrated strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority — across product performance, packaging, brand communication, retail execution and consumer and customer value — productivity, constructive disruption and an agile and accountable organisation," commented Jon Moeller, chief executive.
"We are increasing investments in superiority to drive market growth and sustain strong momentum. We have confidence this remains the right strategy to deliver balanced growth and value creation.”
Additional reporting by ESM
